With interest rates at historic lows and the sharemarket surging higher, Australian households are saving money and planning to spend it on a holiday, says new research.

A St George Bank and Melbourne Institute survey showed that more than 45 per cent of Australians managed to save money in the first three months of 2013, while 12.4 per cent said they were managing to "save a lot".

Putting money aside for holidays or travel was the most popular reason for saving.

Also, the quarterly Household Financial Conditions Report showed outright home ownership rose in all states. The percentage of respondents who own their home outright jumped to 45.6 per cent, from 40.2 per cent in the previous quarter.

"Improved household financial conditions may have allowed some Australians to make greater contributions to their mortgages, and others to actually pay off their homes entirely," St George Bank chief economist Hans Kunnen said in a statement.

The strong performance of the share market so far this year and lower interest rates also might have helped, he said.

Back to business

Australian markets reopen after the Easter break on Tuesday, when the Reserve Bank of Australia hands down its monthly interest rate decision.

The cash rate is tipped to stay at three per cent - all 28 economists surveyed by Bloomberg prior to Easter expected no change.

However, interest will be on RBA governor Glenn Stevens' accompanying statement for clues about the central bank's thinking on the future direction of rates.

"In Australia, the main focus is likely to be on the Reserve Bank which is expected to leave interest rates on hold, AMP Capital Investors chief economist Shane Oliver said in a research note.

Dr Oliver said the the RBA was likely to remain in "wait-and-see" mode given the impact of previous rate cuts was still working its way through the economy.

State by state

The financial conditions survey showed NSW experienced the greatest improvement in household financial conditions, with a 3.8 per cent increase.

It was followed by South Australia (2.9 per cent), Queensland (2.8 per cent), Victoria (2.7 per cent) and Western Australia (1.2 per cent).

South Australia experienced the greatest lift in outright home ownership, from 39.8 per cent to 49.9 per cent for the quarter.